I personally wouldn't worry about it breaking. If it does break Microsoft is pretty lenient on fixing everything for free. I had one for 2 years before it broke. It was completely out of warranty but they fixed it for free anyways. Only took a week to get a new one and it's worked fine ever since.
The key is to fill out the report form online though. If you talk to them on the phone you'll most likely get screwed.
If you think it's a good deal go for it. Dead Space is a good game & Skate 1 & 2 are cheap.
Very misleading wording right here.
Your xbox is fully covered for 1 year after you buy it. It is then covered for two more years after that, but ONLY for the RROD (red ring of death) and one other malfunction involving yellow lights. If it RROD's more than 3 years after you bought it, or something else happens past 1 year, it's over $100 to get it fixed. There are many other malfunctions that they will not cover in the 3 year warranty.
I got "lucky" and mine RROD'd after two years so I got mine fixed for free. Also, I disagree about the website. I would have been out $100 if I did my report online. I called them and got it done for free. The website only shows the status of your 1 year warranty.
So you have to consider how long it's been since your friend bought the console and subtract that from 3 years to see how long you're covered on the most common problem. Most people I play with online have had their xbox's RROD, but I heard that the newer ones have a newer cooling system/fan to prevent the RROD.